Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Relaxo Footwears Ltd - Company Update - ICICI Securities

Posted On: 2020-08-03 08:42:02

Despite Q1FY21 being significantly hampered by Covid-19 headwinds, Relaxo Footwears reported a steady performance, depicting inherent strength of the brand and strong business model. Disruptions owing to store closures (till first week of May) weighed on its performance. However, post lockdown relaxations, green shoots were visible with strong demand for low ticket size products like slippers/open sandals (~67% of product portfolio). Revenue for the quarter de-grew by 44% YoY to Rs. 363.6 crore (vs. estimated decline of 60%). On the profitability front, gross margins fell 420 bps YoY to 50%. However, sharp rationalisation of fixed overheads (other expenses, employee expenses down 61%, 22% YoY, respectively) arrested the EBITDA fall. Subsequently, EBITDA margins contracted merely 70 bps YoY to 15.7%, with absolute EBITDA declining 46% YoY to Rs. 57.0 crore. Other income grew 4.5x YoY to Rs. 6.8 crore (Rs. 5.1 crore pertains to lease rent waiver). Effective tax rate came in at 25% vs. 35% in Q1FY20. Ensuing PAT declined 51% YoY to Rs. 24.2 crore. The overall performance was resilient considering the adverse market environment.

Valuation & Outlook

Given the dominant presence in non-metro cities and being the market leader in value priced segment (in terms of volumes), Relaxo is well placed to further consolidate its market share. Over the years, Relaxo Footwear has maintained balance sheet prudence with controlled working capital cycle (NWC days: 65 days), healthy asset turns of 2.5x and generating RoCE of 20%+. Relaxo, through its strong balance sheet and brand patronage, is expected to tide over the current situation better than small peers. We largely maintain our estimates and bake in revenue & EPS CAGR of 10% & 18%, respectively, in FY20-22E. Given the recent correction in stock price (~20%), we upgrade the stock from HOLD to BUY and maintain our target price of Rs. 715 (56.0x FY22E EPS).

For details, click on the link below:

Shares of RELAXO FOOTWEARS LTD. was last trading in BSE at Rs.597 as compared to the previous close of Rs. 596.25. The total number of shares traded during the day was 69511 in over 7305 trades.

The stock hit an intraday high of Rs. 610.3 and intraday low of 585. The net turnover during the day was Rs. 41594605.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:


Mutual Fund Review - September, 2020 - ICICI Securities

UTI AMC announces IPO date - Angel Broking

Asian Paints - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Britannia Industries - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Hexaware Technologies (Not Rated): Hexaware accepts 475/share as final delisting price - ICICI Securities

CAMS IPO - Day 2 Subscription - Angel Boking

Chemcon Speciality Chemicals - IPO subscribed 12.62 times on second day - Angel Broking

General insurance - Fire, health remain growth drivers, rising Covid claims a concern - ICICI Securities

Supreme Industries - Perfect recipe for rerating; upgrade to BUY - ICICI Securities

Titan Company - Best positioned to gain from faster-than-expected recovery. Upgrade to ADD - ICICI Securities

Sector Update - Telecom - Sep 23, 2020 - ICICI Securities

Allcargo Logistics - Highlights of Blackstone deal - ICICI Securities

I-direct Instinct - Gokaldas Exports

Economy: RBI's trilemma: allows for INR strength - Kotak

HCL Technologies - Company Update - ICICI Securities

Chemcon Speciality Chemicals - IPO Review - ICICI Securities

Angel Broking - IPO Note - YES Securities

TCS - Announcement of its blockhchain based solutions on Microsoft Azure - Angel Broking

Amber Enterpirses acquire Sidwal - Angel Broking

Dixon Technologies - Buy - YES Securities

HCL Technologies acquisition of DWS Limited - Angel Broking

Allcargo Logistics CFO Resignation - Angel Broking

Upgrade to BUY on Gateway Distriparks - Strengthening the balance sheet - HDFC Securities

BUY on ITD Cementation - Execution pickup awaited - HDFC Securities

Allcargo Logistics - Trying to stich through an integrated offering - ICICI Securities

Polymer price tracker - Other polymer (ex-PVC) prices too firm up - ICICI Securities

Angel Broking - IPO Review - ICICI Securities

IPO Review - Computer Age Management Services - ICICI Securities

Company Update - EIH Ltd - ICICI Securities

Gladiator Stocks - Godrej Properties - ICICI Securities

Company Update - Dr Reddy's Laboratories - ICICI Securities

Gladiator Stocks: Pharma Thematic - ICICI Securities

Company Update - Housing & Urban Development - ICICI Securities

Covid Recovery Pulse - E-Way bill generation shows recovery signs with auto volumes flat - ICICI Securities

Quant Pick - UltraTech Cement - ICICI Securities

Lupin & Cipla - Positive News - Angel Broking

Sterling and Wilson Solar Ltd - 106.71 MW order win - Angel Broking

Dr. Reddy's Laboratories - Settles Revlimid litigation in US - ICICI Securities

Natco Pharma - Natco to launch first generic Revlimid - ICICI Securities

Solar Industries - Overseas and defence key to profitability - ICICI Securities

Federal Bank - Strengthening liability muscle; fees & charges revised upwards - ICICI Securities

HCL Technologies Mr. Jyoti Roy, DVP - Equity Strategist, Angel Broking Ltd


I-direct Instinct - Intellect Design Arena

P&G Health - Company Update - ICICI Securities

Relaxo Footwears - Mr. Amarjeet Maurya- AVP - Mid Caps, Angel Broking Ltd

Bata India - Mr. Amarjeet Maurya- AVP - Mid Caps, Angel Broking Ltd

Listing of Happiest Minds Technologies - Angel Broking

Dr. Reddy's Lab - Sep 17, 2020 - Angel Broking

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019